Blood Money: Hezbollah's revenue stream flows through the Americas

Since 9/11, U.S. counterterrorism policy has focused primarily on the threat from al-Qaeda. But before Osama bin Laden's men brought down the Twin Towers , the international terrorist organization with the most American blood on its hands was Hezbollah. Even now, Hezbollah continues on its terrorist path. Last summer, the world watched as violence erupted in the Middle East after Hezbollah's cross-border raid into Israel resulted in the capture of two Israeli soldiers and the killing of eight others. Meanwhile, the organization has honed techniques for financing its killing with proceeds from a wide range of illicit activities.

Hezbollah, the "Party of God," began as a radical Muslim Shiite organization in 1982, in response to the first Israeli-Lebanese war. Its stated goals were, and are, wiping Israel off the map and establishing a Shiite state in Lebanon . Its chief sponsor is the Islamic Republic of Iran, which provides major financial support as well as weapons and paramilitary training. Syria, Lebanon 's neighbor, also lends substantial support.

The two major leaders of Hezbollah are Secretary General Sheikh Sayyed Hassan Nasrallah and the organization's spiritual chief, Sheikh Muhammad Husayn Fadlallah, both named "specially designated global terrorists" by the U.S. government. Fadlallah issued the fatwa authorizing the 1983 bombing of the U.S. Marine barracks that killed 241 Americans, the government has charged.

The "Party of God" has evolved from a guerrilla and terror force, establishing itself as a "legitimate" political party in the Lebanese government and acting as a representative of Lebanon 's large Shiite population. Having gained high political profile, Hezbollah continues to maintain its armed militia and terrorist training bases.

Close to Home. Hezbollah's achievements as a multinational terror organization right here in the United States offer a glimpse into how the group functions. Our nation's porous borders with Mexico and Canada give Hezbollah operatives easy access to carry out fund-raising and recruiting operations. High-level Hezbollah agents have conducted complex, interstate criminal enterprises, raising millions of dollars and enabling the organization to purchase high-tech weaponry and materials to be sent to the group's Lebanese headquarters. These networks demonstrate clear chains of command and engage in a wide array of activities, including cigarette smuggling, human smuggling, drug trafficking, counterfeiting and "charitable work."

Perhaps the best-publicized Hezbollah fundraising scheme in the United States involved a Charlotte, N.C., cigarette-smuggling ring. Operatives bought cigarettes in North Carolina and resold them in Michigan without paying Michigan's higher taxes. Mohamad Youssef Hammoud, the group's ringleader, was convicted in 2002 on several charges: conspiracies to launder money and traffic in contraband cigarettes, immigration law violations and attempted bribery. Evidence in the trial revealed links between ringleader Hammoud and Sheikh Nasrallah, including a photo of the two men together. The case demonstrated the ease with which illegal immigrants take advantage of the U.S. system, raising money from illicit activities to support both an American Hezbollah cell and the group's headquarters in Lebanon.

The most high-profile case of a Hezbollah trained fighter on U.S. soil involved Mahmoud Youssef Kourani. In March 2005, Kourani pleaded guilty to conspiracy to provide material support to a foreign terrorist organization, and in June 2005, he was sentenced to 54 months in prison. The FBI affidavit in the case alleged that Kourani had sent $40,000 to his brother Haidar, Hezbollah's chief of military security in southern Lebanon . An informant told the FBI that Mahmoud Kourani claimed he had trained in Iran on behalf of Hezbollah and was a member of the Hezbollah unit responsible for the kidnapping and murder of Marine Lt. Col. William Higgins in Lebanon in 1988. According to government documents, "On approximately Feb. 4, 2001, Kourani surreptitiously entered the United States by sneaking across the U.S.-Mexico border in the trunk of a car. He reached Mexico by bribing . . . an official at the Mexican consulate in Beirut to give him a Mexican visa."

In addition to human smuggling, Hezbollah financiers have engaged in large-scale drug operations in North America. A federal indictment in January 2002 charged 36 individuals nationwide, including Ohio resident Mohammad Shabib. Investigators believe that since the early 1990s, Shabib managed to deposit roughly $8 million skimmed from drug sales into Chicago bank accounts. Part of the loot is believed to have benefited Hezbollah activities.

A New Front. Hezbollah operatives have frequently sought out sympathetic members of the Lebanese Diaspora to assist them, several of whom have owned and operated Lebanese restaurants. Salim Boughader Mucharrafille, owner of Cafe La Libanesa in Tijuana, Mexico, was arrested in December 2002 for running a ring that allegedly smuggled at least 200 Lebanese compatriots into the United States , including an employee of Al- Manar, Hezbollah's television station. Although it was never confirmed, Boughader was suspected of having helped Kourani to slip over the border. Last May, a Mexican judge sentenced Boughader to 14 years in prison for organized crime and human smuggling.

The case of Rady Zaiter, a.k.a. David Assi Alvarez, is an example of drug-running activities designed to benefit Hezbollah, using a restaurant as a front. In June 2005, Ecuadorian police broke up an international drug-trafficking ring led by the owners of El Turco restaurant: Zaiter and his partner, Maher Hamajo. The restaurant in Quito served as the logistical center for the ring's activities. Drug mules carried cocaine in double bottomed suitcases bound for other countries in South America, as well as Europe and the Middle East. According to investigating authorities, Hezbollah received at least 70 percent of the drug money. Additionally, officials confiscated more than $150,000 and 2,000 euros. Further arrests were made in Brazil, Syria and the Dutch Antilles, bringing the total apprehended to 19 people. El Turco, like the Detroit-area restaurant La Shish that was recently allegedly linked to Hezbollah, was a very popular restaurant, appreciated by the locals.

In May 2006, Detroit-based restaurant owner Tala1 Khalil Chahine and his wife, Elfat El Aouar, were indicted on federal tax-evasion charges. They allegedly concealed more than $20 million in profits from their La Shish restaurant chain and funneled some of those funds to Lebanon . In 2002, Chahine attended an Al-Mabarrat charity event in Lebanon at which he and Sheikh Fadlallah served as keynote speakers. Chahine admitted he attended the charity fund-raiser, reinforcing federal prosecutors' statement that he has "connections at the highest levels of ... Hezbollah." According to the Department of Justice, "Chahine was the representative at the ( Al-Mabarrat Lebanon ) event of a worldwide group of fund-raisers." Federal prosecutors also alleged that agents searching Chahine's Michigan house discovered a letter thanking him for his sponsorship of 40 Lebanese orphans - a term the Department of Justice considers "a euphemism used by Hezbollah to refer to the orphans of martyrs."

Al-Mabarrat has a U.S.-based branch headquartered in Dearborn, Mich. Founded in 1991, the Al-Mabarrat Charitable Organization-USA, Inc., has repeatedly changed its name over the past 15 years. Although Al-Mabarrat acknowledges on its Web site that it works in conjunction with the Al-Mabarrat Association in Lebanon (whose logo it shares), it omits the fact that Al-Mabarrat Lebanon is run by Sheikh Fadlallah. Despite Al- Mabarrat USA's direct link to a Fadlallah-controlled organization, the U.S. branch continues to operate unfettered.

Hezbollah's use of Al-Mabarrat as a fund-raising front is a savvy strategic move, mirroring a tactic long exploited by terrorist groups operating on U.S. soil. By utilizing charities, terrorists can generate popular support by providing some legitimate services, attract contributions from donors both unwitting and aware, and attempt to obscure financial trails. But such operations extend far beyond the United States.

Worldwide Reach. Hezbollah revealed its strong South American presence to the world with the 1992 bombing of the Israeli embassy in Buenos Aires . The attack killed 29 people and wounded more than 240. The group struck again in the Argentine capital in 1994, killing 86 at a Jewish community center in the largest terror attack against Argentina to date.Hezbollah has long used parts of South America as a training ground, in particular the tri-border area where Brazil, Argentina and Paraguay meet. It has demonstrated a keen interest in extending its activities to other parts of Latin America, including Venezuela, Cuba, Panama and Colombia.

The best example of the extent of Hezbollah's South American reach is the 2002 arrest of Assad Ahmad Barakat in Brazil . Designated by the U.S. Treasury Department as a Hezbollah fundraiser, Barakat has been called one of the terrorist organization's most prominent and influential members. He is believed to have transferred up to $50 million to Hezbollah since 1995. Two of his businesses - Casa Apollo, a wholesale electronics store, and Barakat Import-Export Ltd. - were used to launder terrorist money and facilitate the movement of Hezbollah operatives. Both have been designated by the U.S. Treasury Department as terrorist fronts.

Although Europe has thus far been exempt from Hezbollah attacks, numerous intelligence experts and officials assert that the group's operatives maintain cells across the continent. German authorities, in particular, have expressed concern about the presence of several hundred Hezbollah members in their country. Hezbollah has established several front charities, mainly operating from Great Britain and Germany, to raise funds earmarked to support the group's members in Lebanon . For example, the British-based Lebanese Welfare Committee, HELP Charity Association for Relief and Abrar Islamic Foundation are among the charities suspected of channeling funds to Sheikh Nasrallah and Hezbollah.

Reports of an increase in Hezbollah recruiting have emerged in eastern European countries, specifically Slovakia, Bosnia and Russia . And over the past few years, Hezbollah has sent operatives with European identification papers to Israel in order to collect intelligence for future attacks. Efforts by European authorities to curtail Hezbollah's influence have included France 's 2004 ban of Hezbollah's television station and chief propaganda machine, A1- Manar, from that nation's satellite television providers. Spain and the United States have made similar moves.

Finally, Hezbollah has been actively fund-raising in Africa for the past two decades, tapping a pool of Shiite Muslim communities, especially in Senegal and the Ivory Coast . The organization engages in mafia-style extortion, all the while receiving money from its large sympathetic donor base. The money generated from the group's African operations alone runs well into the millions of dollars. The Ivory Coast is used not only for fund-raising but also as a safe haven for Hezbollah operatives on the run. Iran has also stepped up its Ivory Coast presence, financing mosques and sending imams to preach in them.

While al-Qaeda has long utilized the African "blood-diamond" trade to facilitate its operations, Hezbollah has recently begun taking its own share in various West Africa countries, including the Democratic Republic of Congo, Burkina Faso, Togo and Sierra Leone. A blood diamond, also called "conflict diamond" or "war diamond," refers to the precious gem mined in war-torn countries of western and southern Africa, and sold, often clandestinely, in order to finance insurgents, rebels and terrorists. The extortion of diamond merchants is believed to be a tactic adapted by Hezbollah from its South American experience.

New Alliances. One issue with wide-ranging implications for U.S. consumers is the growing alliance between Hezbollah, its regional sponsors, and emerging elements in Latin America - notably Venezuela , where the terrorist group is calling for a stronger relationship with President Hugo Chavez.

After Chavez visited Lebanon last summer, a Hezbollah official told an Indian newspaper, "Mr. Chavez is closer to us than any other Arab leader, and we hope that we will be able to benefit, as he has, from this particular experience (in Lebanon )." The affection seems mutual. On a trip to Iran in July to meet with Supreme Leader Ayatollah Khamenei and President Mahmoud Ahmadinejad, Chavez said, "The brave resistance of the Lebanese people and Hezbollah symbolizes their indomitable spirit and reveals how the Islamic and Arab world is fed up with U.S. policy in the region."Venezuela, an OPEC nation, owns CITGO Petroleum, identified on CITGO's Web site as a "wholly owned subsidiary of Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela ." Filling up at any of the 14,000 CITGO gas stations across the United States thus funds a government that is on the record as being a strong supporter of Hezbollah.

Criminal activity in the United States has raised millions of dollars for Hezbollah as well. The question remains whether Hezbollah members and supporters within our borders possess the wherewithal to carry out attacks if ordered to do so. Although no direct evidence exists of an imminent attack, their presence, as well their ability to conduct illicit operations often undetected by U.S. border security and law-enforcement officials, presents a significant threat to U.S. national security and the safety of American citizens.

Steven Emerson is executive director of The Investigative Project and author of 'American Jihad: The Terrorists Living Among US" (Free Press).